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States continue to stimulate the use of solar energy

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In March 2023 North Carolina Utilities Commission (NCUC) issued final orders in its net metering “Smart Saver” docket. A three-year glide path for solar customers to transition from monthly credits to a more dynamic time-of-use rate structure was approved. As Solar Energy Industries Association (SIEA) reports in its press release, that stimulate the use of solar when it is most valuable. This is a new high bar for solar and storage incentives in the Southeast region.

North Carolina has boasted a strong utility-scale solar market for years while its rooftop solar industry has lagged. The solar and storage industry thanks the NCUC for approving a glide path that ensures monthly crediting for solar customers through 2026 and provides critical certainty for current customers and those considering going solar. as Will Giese, Southeast Regional Director stated. 

The NCUC first adopted an net energy metering (NEM) policy for North Carolina via an 2005 NEM Order. There, the Commission directed utilities in the State of North Carolina to make NEM available to North Carolina customers. Participating customers would receive a kilowatt hour (“kWh”) credit on their monthly bill for any excess kWh delivered to the grid in the previous month.

At this time, in California, on April, 15 2023, the third stage of the development of the NEM program came into force. It called NEM 3.0. California has become the largest solar market in the United States, seeking clean and affordable energy alternatives, and has been among other states trying to increase the value of clean energy assets with net energy metering.

According to pv magazine, NEM 3.0 could be seen as a vehicle to encourage the adoption of storage. Currently, the solar power produced during the day does not correspond to the periods of peak electricity demands that come at night when customers are home, resulting in the higher consumption of traditional energy sources during peak hours. Since California offers time-of-use rate structures, which are required to participate under NEM 3.0, electricity costs during these peak periods will be very high, but storage can save solar energy generated during the day and use it to power homes and businesses during peak demand.

With the decreased value of solar coming under NEM 3.0, implementing storage to offset the lost value will be a natural next step for customer-generators. This allows customers to avoid paying exorbitant electricity rates that come at peak hours, and lowers their usage of fossil fuels, helping the state meet its goal of slashing carbon emissions to 48% below 1990 levels by 2030.

Historically, the leading states in implementing net metering have been California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, Arizona, and West Virginia. These are the states that received the “A” rating from Freeing the Grid in 2015. Freeing the Grid was an annual report card from Vote Solar and the Interstate Renewable Energy Council (IREC) that rates all 50 states on two key clean energy policies: net metering and interconnection standards (currently suspended).

The full range of policies and incentives for the development of solar energy is collected in the Database of State Incentives for Renewables & Efficiency.

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